Pizza Hut offers aggressive value deal for anniversary

Pizza Hut will run a carryout special of large one-topping pizzas for $5.55 through June 15 to celebrate its 55th anniversary.

The offer is valid for Pizza Hut’s signature Pan Pizza, as well as its Thin ‘N Crispy and Hand-Tossed crusts.

“The $5.55 anniversary deal is our way of thanking customers for helping us become the biggest pizza brand in the world,” chief marketing officer Kurt Kane said in a statement. “More people enjoy Pizza Hut pizza every day than any other pizza brand in the world, and we’re proud to be the only ones able to offer a deal this good as part of our anniversary celebration.”

However, one advertising executive said the anniversary is not nearly as relevant as the aggressive price point.

“As soon as you start pulling out anniversaries in your advertising, you’re running out of ideas,” said Tom Denari, president of Indianapolis-based Young & Laramore. “But the $5.55 price point is a testable proposition, and it’s really the best way to figure out how Pizza Hut can really move the top line.”

In a crowded, cutthroat pizza segment, only Little Caesars has been able to consistently offer value near the $5 price point, with its $5 Hot-N-Ready large pizza. Cici’s Pizza offers its buffet for $5 as well.

Pizza Hut’s next largest competitor, Domino’s Pizza, has offered medium two-topping pizzas for a promotional price of $5.99. Earlier this year it sold add-ons from the rest of its menu, like pastas and wings, for that price. Papa John’s Pizza typically does not stray below the $10 price point in marketing its large pizzas.

Pizza Hut has put some guardrails around the promotion to prevent it from sapping too much profitability, Denari surmised, such as the 11-day redemption period and the carryout-only stipulation.

“It’s operating like a very aggressive coupon that expires very quickly,” he said. “I’m sure Pizza Hut has done the math to know it’s not going to hurt them too bad. Being carryout-only minimizes the labor costs, so there’s not too much downside from a cost standpoint for them. It’s hard to be too critical of that part.”

Same-store sales at Pizza Hut’s domestic locations rose 3 percent for the full year in 2012, followed by a 1-percent decrease for the first quarter of 2013.

Dallas-based Pizza Hut is a subsidiary of Louisville, Ky.-based Yum! Brands Inc. It operates or franchises more than 10,000 restaurants in more than 90 countries.